Skyping a Good Deal on eBay

This morning Steve Fulling, CIO of Sento (where I'm on the board), asked me via IM: "why would eBay pay $2.6B for Skype when Oracle "only" paid $5.8B for Siebel?" Since he and I have had lots of conversations about customer interaction hubs and CRM, the context of the conversation naturally flowed in that direction. I realized that in some ways, what Oracle and eBay are doing is similar, although they're operating at opposite ends of the longtail: they're both selling tools for people who sell things to interact with the people who want to buy. Oracle is trying to sell expensive, feature-rich CRM software packages to big companies so that they can manage their customers. eBay enables small merchants to interact with with small numbers of customers for a small monthly fee.

But, why would eBay buy Skype? Unlike Yahoo! or Google, eBay has always had a fairly narrow strategy. Their Web site isn't anything fancy and looks about the same as it did in 1998. So, why buy a VoIP company? I can think of several reasons which are squarely within eBay's area of interest: exploiting longtail opportunities in eCommerce.

This whole thing will be interesting to watch from an identity standpoint as well. eBay and Skype were both huge repositories of identity data. Now, the combined entity is gigantic. There will be plenty of opportunity for misstep. TO really exploit the combined entity, eBay will have to normalize the identities in some way. If they do it right, they could be a key player in Identity 2.0.